Cost of Core Books PDFs

[billd91]

Another problem with the "PDFs should cost as much as print books," argument is that it doesn't take the distribution system into account.

In the FLGS model, WotC sells to a distributor, who in turn sells to your FLGS who sells it to you. Each step along that chain requires profit, but a PDF distribution takes at least one level of distribution out of the equation. I also can't seriously believe that RPGNow takes as much of a cut as a distributor does.

In the end, if you need to sell these books at or near cover price to make any money, you're saying that a PDF distribution is significantly more expensive than print. Is that what's being claimed?

--Steve

Quite frankly, if more of the price can go to the company/people who actually did the development work on the product rather than to middlemen, I won't complain. Hell, I'd love to do that more with the music I buy so that the artists can get a bigger slice and I can cut down the amount going to the record companies.
I'm not begrudging anybody selling a PDF for a bit more than they'd have to sell to the distributor.

 

[billd91]

• Amazon - $23.07
• Barnes & Noble - $25.16
• RPG Shop - $29.29
• Overstock - $21.92

And how long does anyone think Amazon will have the books discounted so much? A few more months? Amazon's discounts are always big at first, but as time goes on, their prices will shift and that PDF's price will look a bit more attractive since I doubt that will go up in price.

 

[Nyarlathotep]

Put the errata in and I'd buy the PDFs. They're expensive, but I'm not flat-broke anymore so I can handle an extra 50 - 60 bucks for a PDF. Without errata though it's a non-buy for me.

 

[Mustrum_Ridcully]

Scott, I must say, this is a point where I feel you have really dropped the ball. A pdf can usually be updated quickly and easily. I know this because it is what I used to do for part of my last job. As long as the fixes are minor and do not cause changes in page breaks and the like, I can't see why WotC does not make the errata changes in the pdf before selling it. If the pdf is updated in the near future, will those buying it now be able to download the corrected version, or will they have to buy a new one? With a print copy the errata is not as big a deal, as they can be hand written into the book. Not so with the pdfs.

Now, I will freely admit, I have not seen the current errata, so I cannot tell if the changes are major page changes or not.

Technically, updating the PDF might be easy. But you can bet that there are a lot of "formal" aspects to consider - gathering all errata, editing it, getting the okay from several responsibles. They will probably only give out the errated PDF if they also give out a new printing with the errata.

 

[Dire Bare]

Scott, I must say, this is a point where I feel you have really dropped the ball. A pdf can usually be updated quickly and easily. I know this because it is what I used to do for part of my last job. As long as the fixes are minor and do not cause changes in page breaks and the like, I can't see why WotC does not make the errata changes in the pdf before selling it. If the pdf is updated in the near future, will those buying it now be able to download the corrected version, or will they have to buy a new one? With a print copy the errata is not as big a deal, as they can be hand written into the book. Not so with the pdfs.

Now, I will freely admit, I have not seen the current errata, so I cannot tell if the changes are major page changes or not.

I'll disagree here. The current PDFs are based on the current books. We won't see the PDFs updated with errata until WotC does another printing of the books with errata included. And you know what, I'm just fine with that. The errata isn't all that serious and is easily incorporated at the table. While WotC is pushing the digital subscription on their own site, the PDFs are not a priority for them. They offer them because they know some people want them, errata or not, and it's easy to take the files they sent to the printer and tidy them up for a PDF release.

However, once D&D Insider gets rolling full speed, I'll bet dollars to donuts that errata WILL be included in the online D&D Compendium. And to me at least, that's worth more than trying to constantly update PDFs.

YMMV of course.

 

[Beginning of the End]

Useful facts to remember.

For a printed book, a publisher generally receives about 40% of the cover price. Sometimes it will be less than that (if Amazon or B&N has negotiated a steeper discount). It will essentially never be more than that. That revenue needs to pay for:

(1) Development costs (amortized over each copy sold)
(2) Publication costs

For a PDF sold through DriveThruRPG/RPGNow, an exclusive publisher receives 70% of the cover price. At some other sites, publishers receive more than that. There is absolutely no way that WotC is receiving less than that if they inked an exclusive deal. (It's even possible that they make more.) That revenue needs to pay for:

(1) Development costs (amortized over each copy sold)

In a situation where you're using your publication files to generate the PDF, the additional development costs for the PDF are either minimal or non-existent.

So let's take a look at what this means for WotC's $35 printed books vs. $25 PDFs. For each printed copy (using the best case scenario for revenue noted above), they're receiving $14 in revenue. For each PDF copy (using the worst case scenario), they're receiving $17.50 in revenue.

So that, right there, means that PDF revenue is 25% higher than print revenue. (And, remember, we're comparing best-case revenue for print vs. worst-case revenue for PDFs.) But revenue is only the first step, because the real question is profit. Since they're using the same files for the PDF product that they used for the print product (Rouse told us that), the development costs are the same -- so we can safely ignore that.

There is no way for us to really know how much WotC is paying to get the books printed. But let's pretend that it's something extraordinarily small -- say 10% of the cover price.

That assumption (which is probably a considerable low-ball) means that WotC is clearing $10.50 in profit for each printed copy of the book and $17.50 for each PDF copy. That means that PDF profit for them is 65% higher than print profit. And if they adjusted the PDF price so that they were clearing the same profit from both sources, it would mean that the PDFs would be selling for $18. Which is roughly the 50% that I and most other people consider a reasonable upper limit for PDF pricing.

 

[Shadeydm]

The point I am trying to make is the majority of the cost of a book is in pre-manufacturing development. Art, words, design, editing, and type-setting plus A&P (advertising & promotion) and general overheads (our building, support departments like human resources, customer service, legal and finance) are all costs that get factored into a books P&L (profit & loss) before the actual MCOGs (manufacturing cost of goods) are calculated. Plus we are a business and have profit margin requirements as is the sales partner.

Good one, you almost had me fooled until I noticed you put editing on the list.

 

[Branduil]

Sell them for $15 each, or all three for $50, and include errata'd updates for free, and I'll buy them.

 

[Jack99]

Sell them for $15 each, or all three for $50, and include errata'd updates for free, and I'll buy them.

I think I would buy them individually then...

 

[Crothian]

and include errata'd updates for free, and I'll buy them.

Updates as they happen are always free.